by Mark Johnston
The post festive period has always made all of us tighten our belts a little. Not just as a result of over indulgence in turkey and mince pies but also a little over indulgence on the high street.
January is always a good time to start paying back those credit card bills and looking to straighten out personal finances. One of the best ways to save money is to look at reducing monthly outgoings. Mortgage payments are one of the biggest outgoings so this is a great place to start.
Tracker mortgages are probably the best deals that are out there especially for those looking to remortgage. First Direct, the telephone bank owned by HSBC tops the tables with a 1.99% 2 year tracker. It has a 65% loan to value so borrowers would need at least 35% equity in their existing home.
Natwest follows closely behind with a two year tracker mortgage at 2.19% which works out at 3.9% APR when the £999 fee is included. Again the loan to value (LTV) is 65% so the average priced home would require a deposit of around £52,000.
Savvy borrowers who are concerned about being exposed to base rate increases should be looking to fix their mortgage as early as possible in the new year. Santander are offering a two year fixed rate mortgage for an amazing 2.65% but a 40% deposit is required whilst the £1995 fee pushes the cost for comparison up to £1995.
First Direct also have a two year fixed rate mortgage at 2.69% with a £999 fee making the cost for comparison a much healthier 3.7% APR. The loan to value is 65% so a fairly large deposit is still required.
The Yorkshire Building Society has a great two year product which has a 75% loan to value so find a deposit would be a lot easier. The fixed rate mortgage has a rate of 2.99% and a fee of £495 which gives a fairly competitive cost for comparison of 4.7% APR.
First time buyers looking for a mortgage this January should take a look at Norwich and Peterborough building societies two year discount mortgage at 2.95% which only requires a very reasonable 15% deposit as the loan to value is 85%.
Those looking to take out a mortgage this year with a friend should check out share to buy. Share to Buy is a specialist mortgage lender that arranges home loans for people looking to share the cost of a new home with a friend, family member or even a housing association on a shared ownership basis (part rental , part purchase). They are currently offering a loan for 4.19% that requires a 15% deposit with no fee at all so the cost for comparison is a fantastic 4.4% APR.
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